Dallas, Texas 07/13/2015 (Financialstrend) – Wal-Mart Stores, Inc. (NYSE:WMT) is weighing in on the government push to bring more jobs back to the United States especially in the manufacturing sector. The giant retail store has embarked on a plan that will see it spend up to $250 billion on American-made products by 2023. The investment is part of a plan intended to give the country’s manufacturing sector a boost.
Calls for American Made Goods
Wal-Mart Stores, Inc. (NYSE:WMT) has come under immense scrutiny and pressure in the recent years on criticism that its demand for low-cost good continues to undermine jobs back at home. However, the retail store looks set to change the same having reiterated that working with U.S producers was good business. A paradigm shift towards American made goods comes on the heels of cheaper energy costs in the US and rising labor costs in China.
Manufacturers in the US are slowly becoming competitive in the space thanks to the low energy costs that has made it easy to compete with their Chinese counterparts. Labor costs in China have soared to 61% of US levels compared to 17% of US levels 15 years ago, paving the way for the US manufacturing sector to be competitive for once. However, the number of people working in factories is still shot by about 5 million compared to the levels of 1990.
Challenges Facing Push for American Made Goods
Wal-Mart Stores, Inc. (NYSE:WMT)’s 2015 U.S Manufacturing Summit provided a perfect opportunity for good producers to pitch their American products to the giant retail store. The company’s executives were at hand to provide the much-needed insights that some of the brands need to grasp to be able to compete against the other brands from abroad.
However, the event highlighted challenges that the American-based companies are poised to face as raw materials and production process remain relatively cheap abroad. Many American companies have been forced to rely on imported parts or materials as one time US based suppliers have all gone out of business.